Australia’s treasurer, Jim Chalmers, issued a warning on Monday about the impact of events in the Middle East on the global economy. He stressed the importance of responsible budgeting and security measures in the upcoming budget, emphasizing the need to address cost-of-living pressures and reform the economy to mitigate risks escalating worldwide.

In light of these global challenges, Chalmers announced that the treasury will revise its growth forecasts for key trading partners, including China, Japan, and Britain. Forecasts for China’s 2024 growth have been slightly increased to 4.75%, but the outlook for next year has been decreased by 0.25 percentage points to 4.25%. Similarly, Japan’s growth forecast for this year has been lowered by 0.25 percentage points to 0.75%.

Despite these challenges, the government is expected to report a budget surplus for the fiscal year ending June 30. However, the surplus may be smaller than in previous years due to falling commodity prices and a softening labor market. The government’s focus will be on managing these economic uncertainties and ensuring stability in the face of global turmoil.